<PAGE>


                                  POPULAR, INC.

                   MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
                           (Dated as of June 30, 2004)


         Medium-Term Notes, Series 5 (collectively, the "Notes") in the
aggregate principal amount of up to $2,500,000,000, less the aggregate initial
offering price of Securities (as defined in the Prospectus, dated December 29,
2003, relating to debt securities and preferred stock of the Company, Popular
International Bank, Inc. and Popular North America, Inc.) authenticated and
delivered upon original issuance other than the Notes prior to or after the date
hereof, are to be offered on a continuous basis by Popular, Inc. (the "Company")
through UBS Securities LLC, Banc of America Securities LLC, Keefe, Bruyette &
Woods, Inc. and Popular Securities, Inc., who, as agents (each an "Agent"), have
agreed to use their reasonable efforts to solicit offers to purchase the Notes
from the Company. The Agents also may purchase Notes as principal for resale.

         The Notes are being sold pursuant to a Distribution Agreement among the
Company and the Agents, dated as of June 30, 2004 (the "Distribution
Agreement"). The Notes will be issued pursuant to the Indenture, dated as of
February 15, 1995, as supplemented by the First Supplemental Indenture, dated as
of May 8, 1997 and the Second Supplemental Indenture, dated as of August 5, 1999
(together, the "Indenture"), each between the Company and J.P. Morgan Trust
Company, National Association (successor in interest to Bank One, N.A.), as
Trustee (the "Trustee"). A Registration Statement (the "Registration Statement,"
which term shall include any additional registration statements filed in
connection with the Notes as provided in the Distribution Agreement) with
respect to the Notes has been filed with the Securities and Exchange Commission
(the "Commission"). The Prospectus dated December 29, 2003, as supplemented with
respect to the Notes, is herein referred to as the "Prospectus." The most recent
supplement to the Prospectus with respect to the specific terms of the Notes is
herein referred to as the "Pricing Supplement."

         The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-Entry Note") delivered to
the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC, or (b) in certificated form (each, a
"Certificated Note") delivered to the purchaser thereof or a person designated
by such purchaser. Owners of beneficial interests in Book-Entry Notes will be
entitled to physical delivery of Certificated Notes equal in principal amount to
their respective beneficial interests only upon certain limited circumstances
described in the Prospectus.

         General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance
with the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in Part III hereof.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture or the Notes, as the case may be.


<PAGE>


                   PART I: PROCEDURES OF GENERAL APPLICABILITY


Date of Issuance/
  Authentication:              Each Note will be dated as of the date of its
                               authentication by the Trustee or its duly
                               appointed authenticating agent. Each Note shall
                               also bear an original issue date (the "Original
                               Issue Date"). The Original Issue Date shall
                               remain the same for all Notes subsequently issued
                               upon transfer, exchange or substitution of an
                               original Note regardless of their dates of
                               authentication.

Maturities:                    Each Note will mature on a date selected by the
                               purchaser and agreed to by the Company which is
                               not less than nine months from its Original Issue
                               Date; provided, however, that Notes bearing
                               interest at rates determined by reference to
                               selected indices ("Floating Rate Notes") will
                               mature on an Interest Payment Date.

Currencies:                    Each Note shall be denominated in one of the
                               currencies or currency units, as specified in the
                               relevant Pricing Supplement, or in such other
                               currency or currency unit as may be agreed from
                               time to time between the Company and the
                               applicable Agent(s) and as specified in the
                               relevant Pricing Supplement, or, if no currency
                               or currency unit is specified therein, in U.S.
                               dollars. Notes denominated in one or more
                               currencies or currency units other than in U.S.
                               dollars are herein referred to as "Multi-Currency
                               Notes." Notes that have the amount of principal
                               payments determined by reference to an index are
                               herein referred to as "Indexed Notes."

Denominations:                 The Notes will be issued in denominations of a
                               minimum of $1,000 and integral multiples of
                               $1,000. Any Notes denominated other than in U.S.
                               dollars will be issuable in denominations as set
                               forth in the relevant Multi-Currency Note
                               Prospectus Supplement. For special provisions
                               relating to Multi-Currency Notes or Indexed
                               Notes, see the related Multi-Currency or Indexed
                               Note Prospectus Supplement.

Registration:                  Notes will be issued only in fully registered
                               form.

Redemption/Repayment:          The Notes will be subject to repayment at the
                               option of the Holders thereof in accordance with
                               the terms of



                                      -2-
<PAGE>

                               the Notes on their respective Repayment Dates, if
                               any. Repayment Dates, if any, will be fixed at
                               the time of sale and set forth in the applicable
                               Pricing Supplement and in the applicable Note. If
                               no Repayment Dates are indicated with respect to
                               a Note, such Note will not be repayable at the
                               option of the Holder prior to Maturity.

                               The Notes will be subject to redemption by the
                               Company on and after their respective Redemption
                               Commencement Dates, if any. Redemption
                               Commencement Dates, if any, will be fixed at the
                               time of sale and set forth in the applicable
                               Pricing Supplement and in the applicable Note. If
                               no Redemption Commencement Dates are indicated
                               with respect to a Note, such Note will not be
                               redeemable prior to Maturity, except as set forth
                               in the Prospectus in the event that the Company
                               is obligated to pay Additional Amounts in respect
                               of the Notes.

Calculation of
  Interest:                    In the case of Fixed Rate Notes, interest
                               (including payments for partial periods) will be
                               calculated and paid on the basis of a 360-day
                               year of twelve 30-day months. In the case of
                               Floating Rate Notes, interest will be calculated
                               and paid on the basis of the actual number of
                               days in the interest period divided by 360, with
                               the exception of Treasury Rate Notes and CMT Rate
                               Notes, for which interest will be calculated on
                               the basis of the actual number of days in the
                               interest period divided by the actual number of
                               days in the year. If an Interest Payment Date
                               with respect to any Fixed Rate Note falls on a
                               day that is not a Business Day (as hereinafter
                               defined), the payment of interest required to be
                               made on such Interest Payment Date need not be
                               made on such day, but may be made on the next
                               succeeding Business Day with the same force and
                               effect as if made on such Interest Payment Date
                               and no interest shall accrue on such payment for
                               the period from and after such Interest Payment
                               Date. If an Interest Payment Date with respect to
                               any Floating Rate Note would otherwise fall on a
                               day that is not a Business Day, such Interest
                               Payment Date will be the following day that is a
                               Business Day, except that in the case of a LIBOR
                               Note, if such day falls in the next calendar
                               month, such Interest Payment Date will be

                                      -3-
<PAGE>

                               the preceding day that is a Business Day. If the
                               Stated Maturity, or date of earlier redemption or
                               repayment, as the case may be, of a Note is not a
                               Business Day, the payment of principal and
                               interest due on such day shall be made on the
                               next succeeding Business Day and no interest
                               shall accrue on such payment for the period from
                               and after such Stated Maturity, or date of
                               earlier redemption or repayment. For special
                               provisions relating to Multi-Currency Notes or
                               Indexed Notes, see the related Multi-Currency or
                               Indexed Note Prospectus Supplement.

Acceptance and
  Rejection of Offers:         The Company shall have the sole right to accept
                               offers to purchase Notes from the Company and may
                               reject any such offer in whole or in part. Each
                               Agent shall communicate to the Company, orally or
                               in writing, each reasonable offer to purchase
                               Notes from the Company received by it. Each Agent
                               shall have the right, in its discretion
                               reasonably exercised, without notice to the
                               Company, to reject any offer to purchase Notes
                               through it in whole or in part.

Preparation of
  Pricing Supplement:          If any offer to purchase a Note is accepted by
                               the Company, the Company, with the approval of
                               the Agent which presented the order, will prepare
                               a Pricing Supplement reflecting the terms of such
                               Note and file the Pricing Supplement relating to
                               the Notes with the Commission in accordance with
                               Rule 424 under the Securities Act of 1933, as
                               amended. Information to be included in the
                               Pricing Supplement shall include:

                                      1. the name of the Company;

                                      2. the title of the securities, including
                               series designation, if any;

                                      3. the date of the Pricing Supplement and
                               the date of the Prospectus Supplement to which
                               the Pricing Supplement relates;

                                      4. the price to public (but only if (a)
                               the trade is being made on an agency basis and
                               (b) such price to public is other than 100%);



                                      -4-
<PAGE>

                                      5. net proceeds to the Company (but only
                               if (a) the trade is being made on a principal
                               basis and (b) the net proceeds to the Company is
                               other than 100%), less what would have been the
                               applicable agency commission;

                                      6. the information with respect to the
                               terms of the Notes set forth below (whether or
                               not the applicable Note is a Book-Entry Note)
                               under "Procedures for Notes Issued in Book-Entry
                               Form -- Settlement Procedures," items A.2, A.3,
                               A.4, A.5, A.6, A.7, A.8 and A.9; and

                                      7. any other terms of the Notes not
                               otherwise specified in the Prospectus or
                               Prospectus Supplement, including, without
                               limitation, any other terms required by the
                               Prospectus or Prospectus Supplement.

                               One copy of such filed document will be sent by
                               telecopy or overnight express (for delivery not
                               later than 11:00 A.M. on the Business Day next
                               following the trade date) to the applicable Agent
                               at the following addresses:

                               To UBS Securities LLC:
                               UBS Securities LLC
                               677 Washington Boulevard
                               Stamford, Connecticut 06901
                               Attention: Fixed Income Syndicate
                               Telephone: (203) 719-1088
                               Telecopy: (203) 719-0495

                               To Banc of America Securities LLC:
                               Banc of America Securities LLC
                               9 West 57th Street
                               NY1-301-2M-01
                               New York, New York 10019
                               Attention: High Grade Debt Capital Markets
                                          Transaction Management
                               Telecopy: (212) 847-5184



                                      -5-
<PAGE>

                               To Keefe, Bruyette & Woods, Inc.:
                               Keefe, Bruyette & Woods, Inc.
                               787 Seventh Avenue
                               New York, New York  10019
                               Attention: Fixed Income Syndicate
                               Telecopy:  (212) 582-5419

                               To Popular Securities, Inc.:
                               Popular Securities, Inc.
                               209 Munoz Rivera Avenue
                               Hato Rey, Puerto Rico  00918
                               Attention: Ken McGrath
                               Telecopy:  (787) 766-3485

                               The applicable Agent will cause a stickered
                               supplemented Prospectus with the trade
                               confirmation to be delivered to the purchaser of
                               the Note.

                               For record keeping purposes, one copy of each
                               Pricing Supplement shall also be mailed or
                               telecopied to each Agent and the Trustee at the
                               following respective addresses:

                               To UBS Securities LLC:
                               UBS Securities LLC
                               677 Washington Boulevard
                               Stamford, Connecticut 06901
                               Attention: Fixed Income Syndicate
                               Telephone: (203) 719-1088
                               Telecopy:   (203) 719-0495

                               To Banc of America Securities LLC:
                               Banc of America Securities LLC
                               9 West 57th Street
                               NY1-103-2M-01
                               New York, New York 10019
                               Attention:  High Grade Debt Capital Markets
                                           Transaction Management
                               Telecopy:   (212) 847-5184



                                      -6-
<PAGE>

                               To Keefe, Bruyette & Woods, Inc.:
                               Keefe, Bruyette & Woods, Inc.
                               787 Seventh Avenue
                               New York, New York  10019
                               Attention: Fixed Income Syndicate
                               Telecopy: (212) 582-5419

                               To Popular Securities, Inc.:
                               Popular Securities, Inc.
                               209 Munoz Rivera Avenue
                               Hato Rey, Puerto Rico  00918
                               Attention:  Ken McGrath
                               Telecopy:   (787) 766-3485

                               To the Trustee:
                               J.P. Morgan Trust Company, National Association
                               227 W. Monroe Street, Suite 2600
                               Chicago, IL  60606
                               Attention:  Institutional Trust Services/Georges
                                           N. Reaves
                               Telephone:  (312) 267-5121
                               Telecopy:   (312) 267-5209

                               In each instance that a Pricing Supplement is
                               prepared, the applicable Agent will affix the
                               Pricing Supplement to supplemented Prospectuses
                               prior to its use. Outdated Pricing Supplements
                               and the Prospectuses to which they are attached
                               (other than those retained for files) will be
                               destroyed.

Settlement:                    The receipt of immediately available funds by the
                               Company in payment for a Note and the
                               authentication and delivery of such Note shall,
                               with respect to such Note, constitute
                               "settlement." Offers accepted by the Company will
                               be settled at a time as the purchaser and the
                               Company shall agree and pursuant to the timetable
                               for settlement set forth in Parts II and III
                               hereof under "Settlement Procedures" with respect
                               to Book-Entry Notes and Certificated Notes,
                               respectively (each such date fixed for
                               settlement, a "Settlement Date"). If procedures A
                               and B of the applicable Settlement Procedures
                               with respect to a particular offer are not
                               completed on or before the time set forth under
                               the applicable "Settlement Procedures Timetable,"
                               such offer shall not be settled until the
                               Business Day following the completion of



                                      -7-
<PAGE>

                               Settlement Procedures A and B or such later date
                               as the purchaser and the Company shall agree.

                               In the event of a purchase of Notes by an Agent
                               as principal, appropriate settlement details will
                               be set forth in the applicable Terms Agreement to
                               be entered into between the applicable Agent and
                               the Company pursuant to the Distribution
                               Agreement.

Procedure for Changing
  Rates or Other
  Variable Terms:              When a decision has been reached to change the
                               interest rate or any other variable term on any
                               Notes being offered by the Company, the Company
                               will promptly advise the Agents and the Agents
                               will forthwith suspend solicitation of offers to
                               purchase such Notes. Each Agent will telephone
                               the Company with recommendations as to the
                               changed interest rates or other variable terms.
                               At such time as the Company advises the Agents of
                               the new interest rates or other variable terms,
                               the Agents may resume solicitation of offers to
                               purchase such Notes. Until such time, only
                               "indications of interest" may be recorded.
                               Immediately after acceptance by the Company of an
                               offer to purchase at a new interest rate or new
                               variable term, the Company, the Agents and the
                               Trustee shall follow the procedures set forth
                               under the applicable "Settlement Procedures."



                                      -8-
<PAGE>

Suspension of
  Solicitation;
  Amendment or
  Supplement:                  The Company may instruct the Agents to suspend
                               solicitation of purchases at any time. Upon
                               receipt of such instructions, the Agents will
                               forthwith suspend solicitation of offers to
                               purchase from the Company until such time as the
                               Company has advised them that solicitation of
                               offers to purchase may be resumed. If the Company
                               decides to amend the Registration Statement
                               (including incorporating any documents by
                               reference therein) or supplement any of such
                               documents (other than to change rates or other
                               variable terms), it will promptly advise the
                               Agents and, except in the case of an amendment by
                               the filing of a document incorporated by
                               reference in the Registration Statement, will
                               furnish each Agent and its counsel with copies of
                               the proposed amendment or supplement. One copy of
                               such filed document, along with a copy of the
                               cover letter sent to the Commission, will be
                               delivered or mailed to the Agents at the
                               following addresses:

                               To UBS Securities LLC:
                               UBS Securities LLC
                               677 Washington Boulevard
                               Stamford, Connecticut 06901
                               Attention: Fixed Income Syndicate
                               Telephone: (203) 719-1088
                               Telecopy:  (203) 719-0495

                               To Banc of America Securities LLC:
                               Banc of America Securities LLC
                               9 West 57th Street
                               NY1-301-2M-01
                               New York, New York 10019
                               Attention: High Grade Debt Capital Markets
                                          Transaction Management
                               Telecopy:  (212) 847-5184

                                      -9-
<PAGE>

                               To Keefe, Bruyette & Woods, Inc.:
                               Keefe, Bruyette & Woods, Inc.
                               787 Seventh Avenue
                               New York, New York  10019
                               Attention: Fixed Income Syndicate
                               Telecopy:  (212) 582-5419

                               To Popular Securities, Inc.:
                               Popular Securities, Inc.
                               209 Munoz Rivera Avenue
                               Hato Rey, Puerto Rico  00918
                               Attention: Ken McGrath
                               Telecopy:  (787) 766-3485

                               In the event that at the time the solicitation of
                               offers to purchase from the Company is suspended
                               (other than to change interest rates or other
                               variable terms) there shall be any offers to
                               purchase Notes that have been accepted by the
                               Company which have not been settled, the Company
                               will promptly advise the Agents and the Trustee
                               whether such offers may be settled and whether
                               copies of the Prospectus as theretofore amended
                               and/or supplemented as in effect at the time of
                               the suspension may be delivered in connection
                               with the settlement of such orders. The Company
                               will have the sole responsibility for such
                               decision and for any arrangements which may be
                               made in the event that the Company determines
                               that such orders may not be settled or that
                               copies of such Prospectus may not be so
                               delivered.

Delivery of Prospectus:        A copy of the most recent Prospectus and Pricing
                               Supplement must accompany or precede the earlier
                               of (a) the written confirmation of a sale sent to
                               a customer or his agent and (b) the delivery of
                               Notes to a customer or his agent.

Authenticity of
  Signatures:                  The Agents will have no obligation or liability
                               to the Company or the Trustee in respect of the
                               authenticity of the signature of any officer,
                               employee or agent of the Company or the Trustee
                               on any Note.



                                      -10-
<PAGE>

Documents Incorporated
  by Reference:                The Company shall supply each Agent with an
                               adequate supply of all documents incorporated by
                               reference in the Registration Statement.

Business Day:                  "Business Day" has the meaning set forth in the
                               Prospectus Supplement.



                                      -11-
<PAGE>


                      PART II: PROCEDURES FOR NOTES ISSUED
                               IN BOOK-ENTRY FORM


         In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its obligations under a Letter of Representations from the
Company and The First National Bank of Chicago to DTC, dated August 6, 1999, as
supplemented by a Bring-Down Letter of Representations from the Company and the
Trustee to DTC, dated June 30, 2004, and a Medium-Term Note Certificate
Agreement between The First National Bank of Chicago and DTC, dated May 26, 1989
(the "Certificate Agreement"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").


Issuance:                      All Fixed Rate Book-Entry Notes having the same
                               Original Issue Date, interest rate, terms of
                               redemption or repayment, if any, and Stated
                               Maturity (collectively, the "Fixed Rate Terms")
                               will be represented initially by a single global
                               security in fully registered form without
                               coupons; and all Floating Rate Book-Entry Notes
                               having the same Original Issue Date, interest
                               rate basis or bases upon which interest may be
                               determined (each, an "Interest Rate Basis"),
                               which may be one or more of the Commercial Paper
                               Rate, the Treasury Rate, LIBOR, the CD Rate, the
                               CMT Rate, the Federal Funds Rate, the Prime Rate,
                               the 11th District Rate, and any other rate set
                               forth by the Company, Initial Interest Rate,
                               Index Maturity, Spread and/or Spread Multiplier,
                               if any, Minimum Interest Rate, if any, Maximum
                               Interest Rate, if any, terms of redemption or
                               repayment, if any, and Stated Maturity
                               (collectively, "Floating Rate Terms") will be
                               represented initially by a single Book-Entry
                               Note.

                               Each Book-Entry Note will be dated and issued as
                               of the date of its authentication by the Trustee
                               or its duly appointed authenticating agent. Each
                               Book-Entry Note will bear interest from a date
                               (the "Interest Accrual Date") which will be (a)
                               with respect to an original Book-Entry Note (or
                               any portion thereof), its Original Issue Date and
                               (b) with respect to any Book-Entry Note (or
                               portion thereof) issued subsequently upon
                               exchange or transfer of a Book-Entry Note or in
                               lieu of a destroyed, lost or



                                      -12-
<PAGE>

                               stolen Book-Entry Note, the most recent Interest
                               Payment Date to which interest has been paid or
                               duly provided for on the predecessor Book-Entry
                               Note or Notes or if no such payment or provision
                               has been made, the Original Issue Date of the
                               predecessor Book-Entry Note or Notes, regardless
                               of the date of authentication of such
                               subsequently issued Book-Entry Note. No
                               Book-Entry Note shall represent any Certificated
                               Note.

Identification:                The Agents have arranged with the CUSIP Service
                               Bureau (the "CUSIP Service Bureau") of Standard &
                               Poor's Ratings Service, a division of the
                               McGraw-Hill Companies ("S&P"), for the
                               reservation of approximately 900 CUSIP numbers
                               for each rank of Notes which have been reserved
                               for future assignment to Book-Entry Notes
                               representing Notes issued in book-entry form and
                               have delivered to the Company, the Trustee and
                               DTC an initial written list of such CUSIP
                               numbers. The Trustee will assign CUSIP numbers to
                               Book-Entry Notes as described below under
                               Settlement Procedure B. DTC will notify the CUSIP
                               Service Bureau periodically of the CUSIP numbers
                               that the Trustee has assigned to Book-Entry
                               Notes. The Trustee will notify the Company at any
                               time when fewer than 100 of the respective
                               reserved CUSIP numbers remain unassigned to
                               Book-Entry Notes, and, if it deems necessary, the
                               Company will reserve additional CUSIP numbers for
                               assignment to Book-Entry Notes representing Notes
                               issued in book-entry form. Upon obtaining such
                               additional CUSIP numbers, the Company will
                               deliver a list of such additional numbers to the
                               Trustee and DTC. Book-Entry Notes having an
                               aggregate principal amount in excess of
                               $500,000,000 and otherwise required to be
                               represented by the same Global Certificate will
                               instead be represented by two or more Global
                               Certificates which shall be assigned the same
                               CUSIP number.

Registration:                  Each Book-Entry Note will be registered in the
                               name of CEDE & CO., as nominee for DTC, on the
                               register maintained by the Trustee under the
                               Indenture. The beneficial owner of a Book-Entry
                               Note (i.e., an owner of a beneficial interest in
                               a




                                      -13-
<PAGE>

                               Book-Entry Note), or one or more indirect
                               participants in DTC designated by such owner,
                               will designate one or more participants in DTC
                               (with respect to such Book-Entry Note, the
                               "Participants") to act as agent for such
                               beneficial owner in connection with the
                               book-entry system maintained by DTC, and DTC will
                               record in book-entry form, in accordance with
                               instructions provided by such Participants, a
                               credit balance with respect to such Book-Entry
                               Note in the account of such Participants. The
                               ownership interest of such beneficial owner in
                               such Book-Entry Note will be recorded through the
                               records of such Participants or through the
                               separate records of such Participants and one or
                               more indirect participants in DTC.

Transfers:                     Transfers of beneficial interests in a Book-Entry
                               Note will be accomplished by book entries made by
                               DTC and, in turn, by Participants (and in certain
                               cases, one or more indirect participants in DTC)
                               acting on behalf of beneficial transferors and
                               transferees of such Book-Entry Note.

Exchanges:                     The Trustee may deliver to DTC and the CUSIP
                               Service Bureau at any time a written notice
                               specifying (a) the CUSIP numbers of two or more
                               Book-Entry Notes Outstanding on such date that
                               represent Book-Entry Notes having the same Fixed
                               Rate Terms or Floating Rate Terms, as the case
                               may be, other than Original Issue Dates, and for
                               which interest has been paid to the same date;
                               (b) a date, occurring at least 30 days after such
                               written notice is delivered and at least 30 days
                               before the next Interest Payment Date for the
                               related Book-Entry Notes, on which such
                               Book-Entry Notes shall be exchanged for a single
                               replacement Book-Entry Note; and (c) a new CUSIP
                               number to be assigned to such replacement
                               Book-Entry Note. Upon receipt of such a notice,
                               DTC will send to its Participants (including the
                               Trustee) a written reorganization notice to the
                               effect that such exchange will occur on such
                               date. Prior to the specified exchange date, the
                               Trustee will deliver to the CUSIP Service Bureau
                               written notice setting forth such exchange date
                               and the new CUSIP number and stating that, as of
                               such exchange date, the CUSIP numbers of the
                               Book-Entry Notes to be


                                      -14-
<PAGE>

                               exchanged will no longer be valid. On the
                               specified exchange date, the Trustee will
                               exchange such Book-Entry Notes for a single
                               Book-Entry Note bearing the new CUSIP number and
                               the CUSIP numbers of the exchanged Book-Entry
                               Notes will, in accordance with CUSIP Service
                               Bureau procedures, be cancelled and not
                               immediately reassigned. Notwithstanding the
                               foregoing, if the Book-Entry Notes to be
                               exchanged exceed $500,000,000 in aggregate
                               principal amount, one replacement Book-Entry Note
                               will be authenticated and issued to represent
                               each $500,000,000 of principal amount of the
                               exchanged Book-Entry Notes and an additional
                               Book-Entry Note will be authenticated and issued
                               to represent any remaining principal amount of
                               such Book-Entry Notes (see "Denominations"
                               below).

Denominations:                 All Book-Entry Notes will be denominated in U.S.
                               dollars and will be issued in denominations of a
                               minimum of $1,000 and integral multiples of
                               $1,000. Book-Entry Notes will be denominated in
                               principal amounts not in excess of $500,000,000.
                               If one or more Book-Entry Notes having an
                               aggregate principal amount in excess of
                               $500,000,000 would, but for the preceding
                               sentence, be represented by a single Book-Entry
                               Note, then one Book-Entry Note will be issued to
                               represent each $500,000,000 principal amount of
                               such Note or Notes issued in book-entry form and
                               an additional Book-Entry Note will be issued to
                               represent any remaining principal amount of such
                               Note or Notes issued in book-entry form. In such
                               a case, each of the Book-Entry Notes shall be
                               assigned the same CUSIP number.

Interest:                      General. Interest on each Note issued in
                               book-entry form will accrue from the Interest
                               Accrual Date of the Book-Entry Note representing
                               such Note. Each payment of interest on a
                               Book-Entry Note will include interest accrued
                               through the day preceding, as the case may be,
                               the Interest Payment Date, Stated Maturity Date,
                               Redemption Date or Repayment Date. Interest
                               payable at Maturity of a Book-Entry Note will be
                               payable to the Person to whom the principal of
                               such Note is payable. DTC will arrange for each
                               pending deposit message described under
                               Settlement Procedure C below to be transmitted to



                                      -15-
<PAGE>

                               S&P, which will use the information in the
                               message to include certain terms of the related
                               Book-Entry Note in the appropriate daily bond
                               report published by S&P.

                               Interest Payment Dates. Interest payments will be
                               made on each Interest Payment Date commencing
                               with the first Interest Payment Date following
                               the Original Issue Date; provided, however, the
                               first payment of interest on any Book-Entry Note
                               originally issued between a Regular Record Date
                               and an Interest Payment Date will occur on the
                               Interest Payment Date following the next Regular
                               Record Date.

                               Fixed Rate Notes. Unless otherwise specified in
                               the applicable Pricing Supplement, interest
                               payments on Fixed Rate Book-Entry Notes will be
                               made semiannually on June 15 and December 15 of
                               each year and at Maturity.

                               Floating Rate Notes. Except as provided in Part I
                               under "Calculation of Interest" and unless
                               otherwise specified in the applicable Pricing
                               Supplement, the Interest Payment Date for a
                               Floating Rate Note will be, in the case of
                               Floating Rate Notes which reset daily, weekly or
                               monthly, on the third Wednesday of each month or
                               on the third Wednesday of March, June, September
                               and December of each year as specified in the
                               applicable Pricing Supplement; in the case of
                               Floating Rate Notes which reset quarterly, on the
                               third Wednesday of March, June, September and
                               December of each year; in the case of Floating
                               Rate Notes which reset semiannually, on the third
                               Wednesday of the two months of each year
                               specified in the applicable Pricing Supplement;
                               and in the case of Floating Rate Notes which
                               reset annually, on the third Wednesday of the
                               month specified in the applicable Pricing
                               Supplement; and, in each case, at Maturity. For
                               additional special provisions relating to
                               Floating Rate Notes, see the Prospectus
                               Supplement.

                               Regular Record Dates. Unless otherwise specified
                               in the applicable Pricing Supplement, the Regular
                               Record Date with respect to any Interest Payment



                                      -16-
<PAGE>

                               Date for a Fixed Rate Note shall be the June 1 or
                               December 1 (whether or not a Business Day)
                               preceding such Interest Payment Date. Unless
                               otherwise specified in the applicable Pricing
                               Supplement, the Regular Record Date with respect
                               to any Interest Payment Date for any Floating
                               Rate Note shall be the date 15 calendar days
                               (whether or not a Business Day) preceding such
                               Interest Payment Date.

                               Notice of Interest Payments and Regular Record
                               Dates. On the first Business Day of January,
                               April, July and October of each year, the Trustee
                               will deliver to the Company and DTC a written
                               list of Regular Record Dates and Interest Payment
                               Dates that will occur during the six-month period
                               beginning on such first Business Day with respect
                               to Floating Rate Book-Entry Notes. Promptly after
                               each Interest Determination Date for Floating
                               Rate Book-Entry Notes, the Company will notify
                               S&P of the interest rates determined on such
                               Interest Determination Date.

Payments of Principal          Payments of Interest Only. Promptly after each
  and Interest:                Regular Record Date, the Trustee will deliver to
                               the Company and DTC a written notice specifying
                               by CUSIP number the amount of interest to be paid
                               on each Book-Entry Note issued under the
                               Indenture on the following Interest Payment Date
                               (other than an Interest Payment Date coinciding
                               with Maturity) and the total of such amounts. DTC
                               will confirm the amount payable on each
                               Book-Entry Note on such Interest Payment Date by
                               reference to the daily bond reports published by
                               Standard & Poor's. On such Interest Payment Date,
                               the Company will pay to the Trustee, and the
                               Trustee in turn will pay to DTC, such total
                               amount of interest due (other than at Maturity),
                               at the times and in the manner set forth below
                               under "Manner of Payment."

                               Payments at Maturity. On or about the first
                               Business Day of each month, the Trustee will
                               deliver to the Company and DTC a written list of
                               principal, interest and premium, if any, to be
                               paid on each Book-Entry Note issued under the
                               Indenture having a Maturity in the following
                               month. The Trustee and DTC will


                                      -17-
<PAGE>

                               confirm the amounts of such principal, premium
                               and interest payments with respect to a
                               Book-Entry Note on or about the fifth Business
                               Day preceding the Maturity of such Book-Entry
                               Note. At such maturity, the Company will pay to
                               the Trustee, and the Trustee in turn will pay to
                               DTC, the principal amount of such Note, together
                               with interest and premium, if any, due at such
                               Maturity, at the times and in the manner set
                               forth below under "Manner of Payment." Promptly
                               after payment to DTC of the principal, interest
                               and premium, if any, due at the Maturity of such
                               Book-Entry Note, the Trustee will cancel and
                               destroy such Book-Entry Note and deliver to the
                               Company a certificate of destruction therefor.


                               Manner of Payment. The total amount of any
                               principal, premium, if any, and interest due on
                               Book-Entry Notes on any Interest Payment Date or
                               at Maturity shall be paid by the Company to the
                               Trustee in funds available for use as of 9:30
                               a.m., New York City time, on such date. The
                               Company will make such payment on such Book-Entry
                               Notes by instructing the Trustee to withdraw
                               funds from an account maintained by the Company
                               with the Trustee. The Company will confirm such
                               instructions in writing to the Trustee. Prior to
                               10:00 a.m., New York City time, on such date or
                               as soon as possible thereafter, the Trustee will
                               pay by separate wire transfer (using Fedwire
                               message entry instructions in a form previously
                               specified by DTC) to an account at the Federal
                               Reserve Bank of New York previously specified by
                               DTC, in funds available for immediate use by DTC,
                               each payment of principal, premium, if any, and
                               interest due on a Book-Entry Note on such date.
                               Thereafter on such payment date, DTC will pay, in
                               accordance with its SDFS operating procedures
                               then in effect, such amounts in funds available
                               for immediate use to the respective Participants
                               in whose names such Notes are recorded in the
                               book-entry system maintained by DTC. Neither the
                               Company nor the Trustee shall have any
                               responsibility or liability for the payment by
                               DTC of the principal, premium, if any, or
                               interest due on the Book-Entry Notes to such
                               Participants.



                                      -18-
<PAGE>

                               Withholding Taxes. The amount of any taxes
                               required under applicable law to be withheld from
                               any interest payment on a Note will be determined
                               and withheld by the Participant, indirect
                               participant in DTC or other Person responsible
                               for forwarding payments and materials directly to
                               the beneficial owner of such Note.

Settlement Procedures:         Settlement Procedures with regard to each
                               Book-Entry Note sold by the Agents, as agents of
                               the Company, will be as follows:

                               A.    The applicable Agent will advise the
                                     Company by telephone of the following
                                     Settlement information:

                                     1.    Taxpayer identification number of the
                                           purchaser.

                                     2.    Principal amount of the Note.

                                     3.    Fixed Rate Notes:

                                           (a)   interest rate;

                                           (b)   Regular Record Dates; and

                                           (c)   Interest Payment Dates.

                                           Floating Rate Notes:

                                           (a)   interest rate basis;

                                           (b)   index maturity;

                                           (c)   spread and/or spread
                                                 multiplier, if any;

                                           (d)   initial interest rate;

                                           (e)   maximum interest rate, if any;

                                           (f)   minimum interest rate, if any;

                                           (g)   interest reset dates;

                                           (h)   interest determination dates;

                                           (i)   interest payment dates; and

                                           (j)   calculation agent.

                                     4.    Price to public of the Note.



                                      -19-
<PAGE>

                                     5.    Trade date.

                                     6.    Settlement Date (Original Issue
                                           Date).

                                     7.    Stated Maturity.

                                     8.    Redemption provisions, if any:

                                           (a)   Redemption Commencement Date

                                           (b)   initial redemption percentage

                                           (c)   annual redemption percentage
                                                 reduction

                                     9.    Repayment Date(s), if any.

                                     10.   Net proceeds to the Company.

                                     11.   Agent's commission.

                               B.    The Company will advise the Trustee by
                                     telecopy or other method acceptable to the
                                     Trustee of the above settlement information
                                     received with respect to each Note from the
                                     applicable Agent and shall confirm to the
                                     Trustee that the principal amount of Notes,
                                     including such Note, issued as of the
                                     relevant Settlement Date shall not exceed
                                     the limit with respect to the principal
                                     amount of Notes specified in the most
                                     recent Company Order delivered to the
                                     Trustee pursuant to Section 303 of the
                                     Indenture.

                               C.    The Trustee will assign a CUSIP Number to
                                     the Book-Entry Note and will telephone and
                                     advise the Company and the applicable Agent
                                     of such CUSIP Number. The Trustee will
                                     communicate to DTC and the applicable Agent
                                     through DTC's Participant Terminal System a
                                     pending deposit message specifying the
                                     following settlement information:

                                     1.    The information set forth in
                                           Settlement Procedure A.

                                     2.    Identification numbers of the
                                           participant accounts maintained by
                                           DTC on behalf of the Trustee and the
                                           applicable Agent.



                                      -20-
<PAGE>

                                     3.    Identification as a Fixed Rate
                                           Book-Entry Note or Floating Rate
                                           Book-Entry Note.

                                     4.    Initial Interest Payment Date for
                                           such Note, number of days by which
                                           such date succeeds the related record
                                           date for DTC purposes (which in the
                                           case of Floating Rate Notes that
                                           reset daily or weekly will be the
                                           date five calendar days immediately
                                           preceding the applicable Interest
                                           Payment Date and in the case of all
                                           other Book-Entry Notes will be the
                                           Regular Record Date, as defined in
                                           the Notes) and, if then calculable,
                                           the amount of interest payment on
                                           such Interest Payment Date (which
                                           amount shall have been confirmed by
                                           the Trustee).

                                     5.    CUSIP number of the Book-Entry Note
                                           representing such Note.

                                     6.    Whether such Book-Entry Note
                                           represents any other Notes issued or
                                           to be issued in book-entry form.

                               D.    The Company will deliver to the Trustee a
                                     Book-Entry Note representing such Note in a
                                     form that has been approved by the Company,
                                     the applicable Agent and the Trustee.

                               E.    The Trustee will complete and authenticate
                                     the Book-Entry Note.

                               F.    DTC will credit such Note to the
                                     participant account of the Trustee
                                     maintained by DTC.

                               G.    The Trustee will enter an SDFS deliver
                                     order through DTC's Participant Terminal
                                     System instructing DTC (i) to debit such
                                     Note to the Trustee's participant account
                                     and credit such Note to the participant
                                     account of the applicable Agent maintained
                                     by DTC and (ii) to debit the settlement
                                     account of the applicable Agent and credit
                                     the settlement account of the Trustee
                                     maintained by DTC, in an amount equal to
                                     the price of such Note less the applicable
                                     Agent's commission. Any entry of such a
                                     deliver order shall be deemed to constitute
                                     a representation



                                      -21-
<PAGE>

                                     and warranty by the Trustee to DTC that (i)
                                     the Book-Entry Note has been issued and
                                     authenticated and (ii) the Trustee is
                                     holding such Book-Entry Note pursuant to
                                     the Certificate Agreement between the
                                     Trustee and DTC.

                               H.    The applicable Agent will enter an SDFS
                                     deliver order through DTC's Participant
                                     Terminal System instructing DTC (i) to
                                     debit such Note to the applicable Agent's
                                     participant account and credit such Note to
                                     the participant account of the appropriate
                                     Participants maintained by DTC and (ii) to
                                     debit the settlement accounts of such
                                     Participants and credit the settlement
                                     account of the applicable Agent maintained
                                     by DTC, in an amount equal to the initial
                                     public offering price of such Note.

                               I.    Transfers of funds in accordance with SDFS
                                     deliver orders described in Settlement
                                     Procedures G and H will be settled in
                                     accordance with SDFS operating procedures
                                     in effect on the Settlement Date.

                               J.    The Trustee will credit to an account of
                                     the Company maintained by the Trustee funds
                                     available for immediate use in the amount
                                     transferred to the Trustee in accordance
                                     with Settlement Procedure G.

                               K.    The Trustee will send a copy of the
                                     Book-Entry Note stamped "SPECIMEN" on each
                                     page to the Company together with a
                                     statement setting forth the principal
                                     amount of Notes Outstanding as of the
                                     related Settlement Date after giving effect
                                     to such transaction and all other offers to
                                     purchase Notes of which the Company has
                                     advised the Trustee but which have not been
                                     settled.



                                      -22-
<PAGE>

                               L.    The applicable Agent will confirm the
                                     purchase of such Note to the purchaser
                                     either by transmitting to the Participant
                                     with respect to such Note a confirmation
                                     order through DTC's Participant Terminal
                                     System or by mailing a written confirmation
                                     to such purchaser.

Settlement Procedures
  Timetable:                   For offers to purchase Notes accepted by the
                               Company, Settlement Procedures "A" through "L"
                               set forth above shall be completed as soon as
                               possible but not later than the respective times
                               (New York City time) set forth below:


                               Settlement
                               Procedure                  Time
                               ----------                 ----

                                   A        11:00 a.m. on the trade date
                                   B        12:00 noon on the trade date
                                   C        2:00 p.m. on the trade date
                                   D        3:00 p.m. on the Business Day before
                                            Settlement Date
                                   E        9:00 a.m. on Settlement Date
                                   F        10:00 a.m. on Settlement Date
                                   G-H      No later than 2:00 p.m. on
                                            Settlement Date
                                   I        4:45 p.m. on Settlement Date
                                   J-L      5:00 p.m. on Settlement Date

                               If a sale is to be settled more than one Business
                               Day after the trade date, Settlement Procedures
                               A, B, and C may, if necessary, be completed at
                               any time prior to the specified times on the
                               first Business Day after such trade date. In
                               connection with a sale which is to be settled
                               more than one Business Day after the trade date,
                               if the initial interest rate for a Floating Rate
                               Note is not known at the time that Settlement
                               Procedure A is completed, Settlement Procedures B
                               and C shall be completed as soon as such rate has
                               been determined, but no later than 11:00 a.m. and
                               2:00 p.m., New York City time, respectively, on
                               the second Business Day before the Settlement
                               Date. Settlement Procedure I is subject to
                               extension in accordance with any extension of
                               Fedwire closing deadlines and in the other events
                               specified in the


                                      -23-
<PAGE>

                               SDFS operating procedures in effect on the
                               Settlement Date.

                               If settlement of a Book-Entry Note is rescheduled
                               or cancelled, the Company shall notify the
                               Trustee and the Trustee will deliver to DTC,
                               through DTC's Participant Terminal System, a
                               cancellation message to such effect by no later
                               than 2:00 p.m., New York City time, on the
                               Business Day immediately preceding the scheduled
                               Settlement Date.

Failure to Settle:             If the Trustee has not entered an SDFS deliver
                               order with respect to a Book-Entry Note pursuant
                               to Settlement Procedure G, then upon written
                               request (which may be evidenced by facsimile
                               transmission) of the Company, the Trustee shall
                               deliver to DTC, through DTC's Participant
                               Terminal System, as soon as practicable a
                               withdrawal message instructing DTC to debit such
                               Note to the participant account of the Trustee
                               maintained at DTC. DTC will process the
                               withdrawal message, provided that such
                               participant account contains a principal amount
                               of the Book-Entry Note representing such Note
                               that is at least equal to the principal amount to
                               be debited. If withdrawal messages are processed
                               with respect to all the Notes represented by a
                               Book-Entry Note, the Trustee will mark such
                               Book-Entry Note "cancelled," make appropriate
                               entries in its records and send such cancelled
                               Book-Entry Note to the Company. The CUSIP number
                               assigned to such Book-Entry Note shall, in
                               accordance with CUSIP Service Bureau procedures,
                               be cancelled and not immediately reassigned. If
                               withdrawal messages are processed with respect to
                               a portion of the Notes represented by a
                               Book-Entry Note, the Trustee will exchange such
                               Book-Entry Note for two Book-Entry Notes, one of
                               which shall represent the Book-Entry Notes for
                               which withdrawal messages are processed and shall
                               be cancelled immediately after issuance, and the
                               other of which shall represent the other Notes
                               previously represented by the surrendered
                               Book-Entry Note and shall bear the CUSIP number
                               of the surrendered Book-Entry Note.

                               If the purchase price for any Book-Entry Note is
                               not timely paid to the Participants with respect
                               to such




                                      -24-
<PAGE>

                               Note by the beneficial purchaser thereof (or a
                               person, including an indirect participant in DTC,
                               acting on behalf of such purchaser), such
                               Participants and, in turn, the applicable Agent
                               may enter SDFS deliver orders through DTC's
                               Participant Terminal System reversing Settlement
                               Procedures G and H, respectively. Thereafter, the
                               Trustee will deliver the withdrawal message and
                               take the related actions described in the
                               preceding paragraph. If such failure shall have
                               occurred for any reason other than default by the
                               applicable Agent to perform its obligations
                               hereunder or under the Distribution Agreement,
                               the Company will reimburse the applicable Agent
                               on an equitable basis for its loss of the use of
                               funds during the period when the funds were
                               credited to the account of the Company.

                               Notwithstanding the foregoing, upon any failure
                               to settle with respect to a Book-Entry Note, DTC
                               may take any actions in accordance with its SDFS
                               operating procedures then in effect. In the event
                               of a failure to settle with respect to a Note
                               that was to have been represented by a Book-Entry
                               Note also representing other Notes, the Trustee
                               will provide, in accordance with Settlement
                               Procedures D and E, for the authentication and
                               issuance of a Book-Entry Note representing such
                               remaining Notes and will make appropriate entries
                               in its records.





                                      -25-
<PAGE>



                      PART III: PROCEDURES FOR NOTES ISSUED
                              IN CERTIFICATED FORM


Denominations:                 The Certificated Notes, other than Indexed Notes
                               and Multi-Currency Notes, will be issued in
                               denominations of a minimum of $1,000 and integral
                               multiples of $1,000. Indexed Notes or
                               Multi-Currency Notes will be issued in the
                               denominations specified in the related
                               Multi-Currency or Indexed Note Prospectus
                               Supplement and Pricing Supplement.

Interest:                      Each Certificated Note will bear interest in
                               accordance with its terms. Interest will begin to
                               accrue on the Original Issue Date of a
                               Certificated Note for the first Interest Payment
                               Period and on the most recent Interest Payment
                               Date to which interest has been paid for all
                               subsequent Interest Payment Periods. Each payment
                               of interest shall include interest accrued to,
                               but excluding, the date of such payment. Unless
                               otherwise specified in the applicable Pricing
                               Supplement, interest payments in respect of Fixed
                               Rate Certificated Notes will be made semiannually
                               on June 15 and December 15 of each year and at
                               Maturity. However, the first payment of interest
                               on any Certificated Note issued between a Regular
                               Record Date and an Interest Payment Date will be
                               made on the Interest Payment Date following the
                               next succeeding Regular Record Date. Unless
                               otherwise specified in the applicable Pricing
                               Supplement, the Regular Record Date with respect
                               to any Interest Payment Date for a Fixed Rate
                               Certificated Note shall be the June 1 or December
                               1 (whether or not a Business Day) preceding such
                               Interest Payment Date. Interest at Maturity will
                               be payable to the person to whom the principal is
                               payable.

                               Except as provided in Part I under "Calculation
                               of Interest" and unless otherwise specified in
                               the applicable Pricing Supplement, the Interest
                               Payment Date for a Floating Rate Certificated
                               Note will be, in the case of Floating Rate Notes
                               which reset daily, weekly or monthly, on the
                               third Wednesday of each month or on the third

                                      -26-
<PAGE>

                               Wednesday of March, June, September and December
                               of each year as specified in the applicable
                               Pricing Supplement; in the case of Floating Rate
                               Notes which reset quarterly, on the third
                               Wednesday of March, June, September and December
                               of each year; in the case of Floating Rate Notes
                               which reset semiannually, on the third Wednesday
                               of the two months of each year specified in the
                               applicable Pricing Supplement; and in the case of
                               Floating Rate Notes which reset annually, on the
                               third Wednesday of the month specified in the
                               applicable Pricing Supplement; and, in each case,
                               at Maturity. Unless otherwise specified in the
                               applicable Pricing Supplement, the Regular Record
                               Date with respect to a Floating Rate Note shall
                               be the date 15 calendar days (whether or not a
                               Business Day) preceding an Interest Payment Date.

Payments of Principal
  and Interest:                Upon presentment and delivery of the Certificated
                               Note, the Trustee or the Company's duly
                               authorized agent will pay the principal amount of
                               each Certificated Note at Maturity and the final
                               installment of interest in next day funds. All
                               interest payments in U.S. dollars on a
                               Certificated Note, other than interest due at
                               Maturity, will be made by check drawn on the
                               Trustee or the Company's duly authorized agent
                               and mailed by such Trustee or agent to the person
                               entitled thereto as provided in the Certificated
                               Note. However, the Registered Owners (as
                               hereinafter defined) of ten million dollars or
                               more in aggregate principal amount of the same
                               series of Certificated Notes (whether having
                               identical or different terms and provisions)
                               shall be entitled to receive payments of
                               interest, other than at Maturity, by wire
                               transfer of immediately available funds if
                               appropriate wire transfer instructions have been
                               received in writing by the Trustee or such agent
                               not less than 16 days prior to the applicable
                               Interest Payment Date.

                               For special provisions relating to Multi-Currency
                               Notes or Indexed Notes, see the related
                               Multi-Currency or Indexed Note Prospectus
                               Supplement.



                                      -27-
<PAGE>

                               The Trustee will provide monthly to the Company a
                               list of the principal and interest in each
                               currency to be paid on Certificated Notes
                               maturing in the next succeeding month. Such
                               Trustee or agent will be responsible for
                               withholding taxes on interest paid as required by
                               applicable law, but shall be relieved from any
                               such responsibility if it acts in good faith and
                               in reliance upon an opinion of counsel.

                               Certificated Notes presented to the Trustee or
                               the Company's duly authorized agent at Maturity
                               for payment will be cancelled by such Trustee or
                               agent. All cancelled Certificated Notes held by
                               such Trustee or agent shall be destroyed, and the
                               Trustee or agent shall furnish to the Company a
                               certificate with respect to such destruction.

Settlement Procedures:         Settlement Procedures with regard to each
                               Certificated Note purchased through the Agents,
                               as agents, shall be as follows:

                               A.    Each Agent will advise the Company by
                                     telephone of the following Settlement
                                     information with regard to each
                                     Certificated Note:

                                     1.    Exact name in which the Certificated
                                           Note is to be registered (the
                                           "Registered Owner").

                                     2.    Exact address or addresses of the
                                           Registered Owner for delivery,
                                           notices and payments of principal,
                                           premium, if any, and interest.

                                     3.    Taxpayer identification number of the
                                           Registered Owner.

                                     4.    Principal amount of the Certificated
                                           Note.

                                     5.    Denomination of the Certificated
                                           Note.

                                     6.    Fixed Rate Notes:

                                           (a)   interest rate;

                                           (b)   Regular Record Dates; and

                                           (c)   Interest Payment Dates.



                                      -28-
<PAGE>

                                     Floating Rate Notes:

                                           (a)   interest rate basis or bases;

                                           (b)   index maturity;

                                           (c)   spread or spread multiplier, if
                                                 any;

                                           (d)   initial interest rate;

                                           (e)   maximum interest rate, if any;

                                           (f)   minimum interest rate, if any;

                                           (g)   interest reset dates;

                                           (h)   interest determination dates;

                                           (i)   interest payment dates; and

                                           (j)   calculation agent.


                                     Multi-Currency or Indexed Notes:

                                           (a)   specified currency;

                                           (b)   index, if any;

                                           (c)   base rate of exchange, if any;
                                                 and

                                           (d)   any other applicable terms.

                                     7.    Currency or currency unit in which
                                           the Certificated Note is to be
                                           denominated.

                                     8.    Price to public of the Certificated
                                           Note.

                                     9.    Settlement Date (Original Issue
                                           Date).

                                     10.   Stated Maturity.

                                     11.   Redemption provisions, if any:

                                           (a)   Redemption Commencement Date

                                           (b)   initial redemption percentage

                                           (c)   annual redemption percentage
                                                 reduction

                                     12.   Repayment Date(s), if any.

                                     13.   Net proceeds to the Company.

                                     14.   Agent's commission.


                               B.    The Company shall provide to the Trustee by
                                     telecopy or other method acceptable to the



                                      -29-
<PAGE>

                                     Trustee the above Settlement information
                                     with respect to each Certificated Note
                                     received from the Agents and the name of
                                     the applicable Agent and shall confirm to
                                     the Trustee that the principal amount of
                                     Notes, including such Certificated Note,
                                     issued as of the relevant Settlement Date
                                     shall not exceed the limit with respect to
                                     the principal amount of Notes specified in
                                     the most recent Company Order delivered to
                                     the Trustee pursuant to Section 303 of the
                                     Indenture. The Company also shall cause the
                                     Trustee or its duly appointed agent to
                                     issue, authenticate and deliver
                                     Certificated Notes in accordance with the
                                     Settlement Procedures Timetable set forth
                                     below. The Company also shall provide to
                                     the Trustee and the applicable Agent a copy
                                     of the applicable Pricing Supplement. The
                                     Company also shall provide to the Trustee
                                     and the applicable Agent a copy of a
                                     Multi-Currency or Indexed Note Prospectus
                                     Supplement, if applicable.

                               C.    The Trustee or its duly appointed agent
                                     will complete and authenticate the
                                     Certificated Notes in form approved by the
                                     Company.

                               D.    With respect to each trade, the Trustee
                                     will deliver the Certificated Note and one
                                     photocopy thereof stamped "SPECIMEN" on
                                     each page to the applicable Agent at the
                                     following addresses:

                               UBS Securities LLC
                               677 Washington Boulevard
                               Stamford, Connecticut 06901
                               Attention:  Fixed Income Syndicate
                               Telephone:  (203) 719-1088
                               Telecopy:   (203) 719-0495

                               Banc of America Securities LLC
                               9 West 57th Street
                               NY1-301-2M-01
                               New York, New York 10019
                               Attention: High Grade Debt Capital Markets
                                          Transaction Management


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<PAGE>

                               Telecopy:   (212) 847-5184

                               Keefe, Bruyette & Woods, Inc.
                               787 Seventh Avenue
                               New York, New York 10019
                               Attention: Fixed Income Syndicate
                               Telecopy: (212) 582-5419

                               Popular Securities, Inc.
                               209 Munoz Rivera Avenue
                               Hato Rey, Puerto Rico 00918
                               Attention: Ken McGrath
                               Telecopy: (787) 766-3485

                               The Trustee will keep Stub 1. The applicable
                               Agent will acknowledge receipt of the
                               Certificated Note through a broker's receipt and
                               will keep the photocopy. Delivery of the
                               Certificated Note will be made only against such
                               acknowledgment of receipt.

                               Upon determination that the Certificated Note has
                               been authorized, delivered and completed as
                               aforementioned, the applicable Agent will wire
                               the net proceeds of the Certificated Note after
                               deduction of its applicable commission to the
                               Company pursuant to standard wire instructions
                               given by the Company.

                               E.    The applicable Agent will deliver the
                                     Certificated Note, as well as a copy of the
                                     Prospectus and any applicable Pricing
                                     Supplement or Supplements received from the
                                     Trustee, to the purchaser against payment
                                     in immediately available funds.

                               F.    The Trustee will send a photocopy of the
                                     Certificated Note stamped "SPECIMEN" on
                                     each page to the Company.

Settlement Procedures
  Timetable:                   For offers to purchase Certificated Notes
                               accepted by the Company, Settlement Procedures
                               "A" through "F" set forth above shall be
                               completed on or before the respective times set
                               forth below:



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                               Settlement
                               Procedure         Time
                               ----------        ----

                                   A-B      3:00 PM on Business Day prior to
                                              Settlement
                                   C-D      2:15 PM on Settlement Date
                                   E        3:00 PM on Settlement Date
                                   F        5:00 PM on Settlement Date

Failure to Settle:             In the event that a purchaser of a Certificated
                               Note from the Company shall either fail to accept
                               delivery of or make payment for a Certificated
                               Note on the date fixed for settlement, the
                               applicable Agent will forthwith notify the
                               Trustee and the Company by telephone, confirmed
                               in writing, and return the Certificated Note to
                               the Trustee.

                               The Trustee or the Company's duly authorized
                               agent, upon receipt of the Certificated Note from
                               the applicable Agent, will immediately advise the
                               Company, and the Company will promptly arrange to
                               credit the account of the applicable Agent in an
                               amount of immediately available funds equal to
                               the amount previously paid by the applicable
                               Agent in settlement for the Certificated Note.
                               Such credits will be made on the Settlement Date
                               if possible, and in any event not later than the
                               Business Day following the Settlement Date;
                               provided that the Company has received notice on
                               the same day. If such failure shall have occurred
                               for any reason other than failure by the
                               applicable Agent to perform its obligations
                               hereunder or under the Distribution Agreement,
                               the Company will reimburse the applicable Agent
                               on an equitable basis for its loss of the use of
                               funds during the period when the funds were
                               credited to the account of the Company.
                               Immediately upon receipt of the Certificated Note
                               in respect of which the failure occurred, the
                               Trustee or the Company's duly authorized agent
                               will cancel and destroy the Certificated Note,
                               make appropriate entries in its records to
                               reflect the fact that the Certificated Note was
                               never issued, and accordingly notify the Company
                               in writing.





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